THE BIG FLATLINE

Oil and the No-Growth Economy

Contradicting conventional wisdom about the worldwide recession now in its fourth year, a Canadian economist predicts a gloomy future for consumers who worship growth.

Beginning in 2008, writes Rubin (Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization, 2009), the high cost of oil consumption drove many nations on different continents into an economic tailspin. The mortgage crisis in the United States, so often blamed as the primary cause, was collateral damage rather than the trigger. The U.S. and other industrialized nations highly dependent on oil cannot sustain growth; oil prices in the triple digits will force consumers to cut back on everything from automotive transportation to eating at restaurants. With consumerism growing precipitously in China and India as their already massive populations expand, those nations will find ways to grab more fossil fuels, and the U.S. will be left behind in the competition for limited, nonrenewable energy sources. Rubin is not shy about trumpeting the correctness of his analysis; he states unequivocally that the reason economists and politicians have failed to reverse the current recession is that they are relying on outmoded world views. He spotlights Denmark as a nation that has come to grips with oil shortages by charging high prices for energy, thus directly discouraging consumption. He notes that Danish citizens have supported central planning for a ramped-down consumer society by using bicycles as primary transportation, among other realistic lifestyle decisions. Advances in technology will never be significant enough to allow continued economic growth, Rubin writes, and he characterizes green energy sources as worthy but inconsequential.